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Global Insight Perspective
Significance
The reported increase in proven oil reserves of the Middle East and North Africa (MENA), from 729 billion barrels in 2003 to 811 billion barrels in 2008, dwarfs additions to reserves in the rest of the world put together over the same period, implying that oil revenue will remain the region's dominant source of foreign exchange.
Implications
Several MENA countries witnessed sizeable increases in their proven reserve levels during this period, including Saudi Arabia, Kuwait, Libya, and Iran.
With the information about reserves controlled by these countries' respective governments, the estimates could very well overstate reserve levels and should be viewed with caution.
Outlook
Uncertainty about the true size of the region's proven reserves represents a major risk to any assessment of the region's capacity to remain the global economy's supplier of last resort.
Bryan Plamondon, economist
"The Middle East's huge oil-reserve increase, coupled with surging growth in energy demand, means that the region's geopolitical importance should only increase over the coming decades."
Recent estimates released by the EIA in its 2008 World Energy Outlook report showed that the world's total proven crude oil reserves have increased by 119 billion barrels since 2003, rising from 1.21 trillion barrels to 1.33 trillion barrels in 2008.
Close to 70% of this increase was attributed to rising reserve levels in the MENA region.
Indeed, MENA's proven oil reserves have grown by 82 billion barrels over the past five years, to 811 billion barrels in 2008. The bulk of this rise came from the Middle East, with four countries accounting for a 63-billlion-barrel increase in reserves.
Iran reported the biggest increase, of 49 billion barrels in oil reserves, over the period 2003-08, to 138 billion barrels.
Iraq, Kuwait, and Saudi Arabia accounted for the remainder of the Middle East's rise in reserves.
Kuwait's proven oil reserves have grown by nearly 8 billion barrels over the last five years, leaving the Gulf state with a current level of 104 billion barrels.
Saudi Arabia's oil reserves grew to 267 billion barrels in 2008, an increase of 5 billion barrels over 2003's figure, while Iraq's oil reserves increased by about 3 billion barrels, to reach a total of 115 billion barrels.
Yemen, however, witnessed fall in its proven oil reserves of 1 billion barrels in 2007, with the level remaining constant in 2008.
This is a significant decline given that the country's oil reserves amount to a meagre 3 billion barrels.
North Africa, which possesses far smaller oil reserves than the Gulf region, has also witnessed a rise in oil reserves since 2003.
Total proven crude oil reserves in North Africa increased from 43 billion barrels in 2003 to nearly 63 billion barrels in 2008, representing a 19-billion-barrel increase.
Libya's oil reserves have grown by 12 billion barrels over the past five years, to 41 billion barrels.
Proven oil reserves in Algeria rose to an estimated 12 billion barrels in 2008, from just 9 billion barrels in 2003.
Meanwhile, Sudan's oil reserves, which had held steady at just under 0.6 billion barrels until 2007, jumped to 5 billion barrels.
Although Sudan's reserves remain comparably small, the large jump highlights the degree of development in the country's oil sector in recent years.
Lara Lynn Golden, News Editor
